Gavin Hinks, Accountancy Age, Tuesday 11 May 2010 at 09:12:00

Poor succession planning underlies inability to build consolidator


Succession planning if often spoken of as the great threat to UK accountancybut it seems colleagues in New Zeland are going through identical problems.

An article in the country's financial newspaper the National BusinessReview (NBR) reveals a would-be consolidator who has spent two yearssearching for small firms willing to sell up with no success.

Stephen Nicholas, chief executive of Openside Chartered Accountants, inWellington, said they had received little or no interest despite being in touchwith several firms.

Nicholas is quoted saying: "Accountants are very good at dishing out adviceon how to grow and exit a business, but are not so good at taking it."

He adds: "Many seem to be operating almost as sole traders rather thanthinking about how to build a business for sale."

Nicholas said he believes consolidation in the New Zealand market is "absolutely crucial" because it was increase the access for small businesses toexpert advice.

The article said that partners in small firms tend to be over 60 and "usually work until their physical, mental or financial health deterioratesrather than sell in advance."

Here in the UK things have been slightly different. RSM Tenon, the UK'sbiggest consolidator, will list on the main board of the London Stock Exchangelater this month.

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Find the full NBR articlehere.